Doing Business in a world of uncertainty

Blog Article
20 Mar 2018

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Just as nature abhors a vacuum, uncertainty provokes similar feelings for business. As this white paper makes clear, a growing nationalist and protectionist mindset around the world is creating a fresh set of challenges for global businesses. Unexpected political and economic developments of the past few years have created an environment that clouds the long-term business planning horizon. Enterprises are right to be concerned about any potential business risks from world events beyond their control. The research presented in this report paints a sobering picture; the detail deserves study to gain a greater understanding of the forces at work in the world today.

But as this report makes clear, disruption is not the whole picture. As a small, open, globalized economy, Ireland is especially susceptible to winds of change. Yet, companies continue to invest in Ireland. According to the latest data on estimated fDI inflows from UNCTAD, Ireland is one of the top ten host economies in 2017. In an ideal world, businesses seek consistency, stability, openness, and transparency. They balance these considerations with a need to keep investing outside their home markets. The European Union is a natural location as the world’s largest trading bloc. Any business with global aspirations needs to address this market, and to set up operations in Europe to comply with regional regulations and to be closer to their customers.

In fact, the report suggests an approach for globally focused enterprises to counter negative sentiments by establishing deeper roots with the countries where they do business. This means not simply locating sales offices but developing manufacturing or operational facilities. Over recent decades, Ireland’s inward investment model has been built on this premise: land and expand. Many multinationals began with support or back-office operations, but have developed over time into sophisticated sites that make a valued contribution to their parent company’s bottom line.

Businesses cannot remain blind to the challenges of today’s world, but they cannot stand still either. This report concludes that companies may find it easiest to locate operations in areas where they and the host share cultural, administrative, geographic, and economic affinities. Ireland is such a location. Ireland is not just any port in a storm of worldwide uncertainty, but a truly long-term safe harbor for today’s global enterprise.